The Next Paradigm Shift: Understanding What makes Young India tip the balance its way !!!
We are at the cusp of another Digital Revolution and India with its abundant pool of Multi-skilled Technology professionals, cost effective Per unit labour cost along with the frugal innovation gene, is in a unique position to take advantage of this revolution. Below are few of the independent factors that has an influence on the way India n economy can perform on the global market.
I. Best youth Average:
The Socio-political, economic and demographic developments in a country, very much depends on the youth population and India currently has the best youth average in the world. The latent power and the demographic shift of the Indian youth population can increase economic participation, reduce dependency & more importantly increase productivity which will support economic growth.
II. Skilled Workforce:
Be it any country, the factor for missing growth opportunities is the inadequate supply of skilled workforce.For instance, while Spain could achieve solid economic growth, over the past 3 to 4 years, the rest of Europe is yet to find that momentum vis-à-vis the market performance.
Till recently, wealthy markets (like US), were hunting for skilled migrants from other countries to handle the shortage of a aging workforce. Immigrants back filled their labor pool of active workforce. It was Business as Usual, until the recent political movement of Nativism started engaging the business world with unforeseen challenges. As the anti-immigrant movements are heating up, the credo – “Migrate to New Pastures” is slowly waning off as a rallying cry among the youth in the developing countries and they are looking inward for ways to gain from the global economy.
In developed economies like Europe, Japan, US et.al. the youth average rate of the skilled workforce is rather bleak and countries like Australia which are better positioned with regards to skill, doesn’t have the depth to support with a large pool of resources.
India seems to be the best positioned to supply the worlds digital skill needs, with better professional and vocational capabilities, and unlike other countries’ workforce, it’s the Indian workforce which is at an advantage, in the global war between nations to attract high-skilled immigration.
(This is more noticeable in the tech world which was pivotal for India’s economic growth in the past two decades, which in turn reduced the Employment Dependency Ratio. The outsourcing industry’s growth was the catalyst that encouraged Indian government to invest in IT infrastructure, training and enabling services)
III. Tech Startups tackling “minimum unit labor cost”:
Even in a country like India which has the fastest growing base for technology startups globally; the fuel for fresh momentum lies in the way companies successfully re-invent their business model to take advantage of the labour market trends. Headlines like “India to have highest salary increase in 2017 ” in Economic Times and “Wage growth will reach its highest this year” doing the rounds in social media is pretty good for the job seekers but can also be challenging for early stage startups. It also reflects the “mismatch” in talent demand and supply which needs to be bridged time and again by one or the other.
In India, startups building positive and resilient organizations are not just creating jobs but also creating an active pool of skilled workforce, which obviously requires a good amount of formal training. It’s this contribution towards bridging the “mismatch” which needs to continue and measures should be in place to create an ecosystem that buys time for them to flourish.
Government policies to create a rational wage system is good but it will do even better if it can also provide an encouraging cover period which nurtures young companies and protects it from a very high “per unit labour cost”.
IV. Reskilling/Upskilling the existing workforce with technologies for Business Advantage:
Human jobs being made obsolete by the rise of automation initiatives and Artificial Intelligence, is like the predictions during the period of industrial revolution that human jobs would become redundant or like the headline “March of the machine makes idle hands” in New York Times in the early part of 20th Century. Routine jobs are bound to be automated and guess if we look at the past, technology has always created more jobs than it destroys.
Automating a particular job means we are doing it more quickly and cheaply, thereby we can assume it would lead to the creation of more opportunities for much more jobs that are not automated.The point is to reskill the existing resource pool to create business advantage through automation initiatives. India, for instance, has a huge pool of technology resources and based on the need, industry has upskilled them in tools or programming languages considering the job in hand. Few of these tools or technologies have been phased out today and these resources have had to upskill or Reskill themselves.
Reskilling is not always an easy task as it sounds, especially in this era of digitization, but the tech industry is so mature in India, a collaborative effort will make it possible and also help companies achieve more productivity from existing resource strength.
V. Frugal Innovations:
“Frugal Innovation” is a concept of creating cost effective and innovative solutions on a shoestring budget. Outsourcing IT and ITES services can itself be termed a frugal innovation model from the nineties.
So, when companies like Uber which works on shared economy invested in Indian market, it’s natural they have invested heavily in frugal solutions that gives more value and thereby created a “frugal innovation gene” in the system, which is now being inherited by many or so who today are delving into frugal ideas that can deliver quality at a cost-effective price.
The new found stability in the Indian economy is the start of a boom and would assure steady salary growth year on year. Of course performance driven forced/unforced attrition is going to continue as ultimately it is results that matter. The evolving challenge for the Indian startup would be to professionally manage the “unit Labour cost” while its beginning to develop broad strength in technology. The high availability of the skilled workforce , with a good many of these having international work experience, is The Capital Asset of the country. And success depends on how well we craft a model to engage them efficiently.